Atacama Minerals Corp.

Atacama Minerals Corp.

June 05, 2009 11:44 ET

Atacama Reports Positive Financial Result on Iodine Operations at End of First Quarter

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 5, 2009) - Atacama Minerals Corp. ("Atacama" or "the Company") (TSX VENTURE:AAM) is pleased to provide an update on its activities during the first quarter period ending March 31, 2009.

Atacama Minerals is proud to have achieved a positive financial result on iodine operations at its Aguas Blancas Mine in northern Chile in the first quarter of 2009, despite the negative effects of the economic downturn facing the international mining community.

Management believes a significant turnaround has been made going forward with Company operations. This result is attributable to a number of factors which occurred during the first quarter. The price of iodine increased to an all time high while a number of operational challenges were met for improving iodine production. A new mine manager, Mr. Chris Harrison, was appointed in January and several measures were undertaken to improve operations. The design of the heap leaching process was improved and modifications were made to the iodine plant to accommodate increased production. The results of these measures are expected to support the continued success of the Company in the coming months and years.

The first quarter of 2009 saw the Company report a positive income from iodine mining operations of $1.3 million, up from $283,000 for the same period in 2008. Net loss for the quarter was $561,000, down from $848,000 for the same period in 2008.

The positive income from mining operations was partly due to a record iodine price slightly in excess of $28 per kilogram coupled with lower production costs. Iodine prices are expected to remain at favorable levels for the remainder of the year, but will naturally depend on world economic developments.

Financial Highlights

Three months ended Three months ended
March 31, 2009 March 31, 2008
(Unaudited) (Unaudited)
Financial USD $'000, except
for data per share
Total Revenue 5,586 5,072
Cost of goods sold 3,271 3,706
Expenses 1,756 1,201
Earnings before interest,
income taxes, foreign exchange,
write downs, depletion,
depreciation amortization and
accretion 1,355 620
Net loss 561 849
Basic loss per share (0.00) (0.01)

Operating Highlights

Three months Three months Three months
ended ended ended
March 31, 2009 December 31, 2008 March 31, 2008
Tonnes Mined metric
tonnes (Mt) 1,037,490 1,050,299 451,097
Iodine Grade (ppm) 549 595 673
Iodine Produced (Mt) 246 203 243
Iodine Sold (Mt) 199 205 213

Sales revenue for the first quarter of 2009 was higher at $5.6 million as compared to $5.1 million from the previous year. The increase in revenues was a result of higher iodine prices offset in part by lower tonnes sold.

Production costs for the first quarter of 2009 were lower at $3.3 million compared to $3.7 million for 2008, due to lower costs for fuel, sulfur, sulfuric acid and other operating supplies when compared to the same period in 2008.

Expenses for the first quarter of 2009 were higher at $1.8 million compared to $1.2 million for 2008 mainly due to a $714,000 foreign currency translation loss and $195,000 in stock based compensation. The large foreign exchange translation loss resulted from the weakening of the Canadian dollar against the US dollar.

As of March 31, 2009, the Company is in a strong liquidity position with cash and cash equivalents of $28.5 million and working capital of $26.5 million. Short term bank debt as of March 31, 2009 was $12 million.

Tonnes of ore mined during the first quarter of 2009 were higher compared to the same period of 2008 as the Company increased the tonnes of mined ore to the heap leach pads. The increase in tonnes mined is expected to lead to an increase in iodine production, noting that there is a delay of 3 to 4 months before ore on leach pads produces significant amounts of iodine. Iodine production for the first quarter of 2009 was impacted by operational downtime due to electrical power supply interruptions, solution pumps failure and heap leach solution system changes. These operational issues have been addressed and normal monthly production is expected to be achieved in the second quarter of 2009.

During the first quarter of 2009, modifications were made to the feeding system of the new agitated leach plant and testing is now underway. The Company expects the agitated leach plant to be operational toward the end of the third quarter of this year. The agitated leach plant is designed to increase production capacity from 1,000 tonnes of iodine per year to 1,500 tonnes per year.

An on-going drill program is being conducted at the Aguas Blancas mine for the purpose of converting caliche ore in the resource category to the reserve category. In addition, exploration drilling for discovery of new resources outside the current limits is continuing. The Company expects to report on the results of this program during the fourth quarter of this year.

Ground work is underway for the selection and permitting of drill targets for the Company's potash exploration project located near Salvador, Brazil. Drilling is expected to begin in early third quarter of this year.

On behalf of the Board,

Edward F. Posey, President

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Atacama Minerals Corp.
    Sophia Shane
    Corporate Development
    (604) 689-7842
    (604) 689-4250 (FAX)